MAP: Green steel hotspots spread across Europe

Fastmarkets has plotted the locations of the continuing and proposed projects for the decarbonization of the European steel sector.

This includes projects and targets for green steel, carbon capture, carbon neutral, net zero, low-carbon emissions and fossil-free steel.
Hotspots appear in Germany, France and Sweden, where steelmaking is already well established. Policy, funding and sharing of infrastructure are now key for success in decarbonizing.
Reforming the European steel industry
The European Union plans to be the first climate-neutral continent by 2050 under the Paris Agreement, with steelmakers under pressure to reduce their carbon output under the EU Emissions Trading System (ETS).
The European Commission (EC) has pledged to support the energy-intensive steel industry on its path to a zero carbon production process by 2030, with funding from the Innovation Fund for small and large projects including low-carbon technologies, renewables and carbon capture and storage (CCS).
The EC will also support the large-scale deployment of hydrogen in decarbonizing industries.
Steelmakers will invest in existing assets to reduce carbon emissions rather than relocate those assets, according to panelists at Fastmarkets' 2021 Steel Success Strategies Industry Briefing in June.
Green steel partnerships forming across Europe
Hubs of industrial activity and steelmaking have always existed, but now steel makers are joining other hard-to-abate industries in a bid to share funding, research and costs, as well as infrastructure.
Access to, and cross-sector sharing of, existing infrastructure networks - such as gas, future pipelines for hydrogen and renewable power networks - are key for the steel industry and other carbon intensive industries to succeed in their emission reduction aims.
Many steelmakers have entered into renewable power purchase agreements (PPA) or are installing renewable energy sources. Salzgitter, for example, is building a wind farm as part of its hydrogen steelmaking efforts, known as WindH2.
Building the framework for net-zero steel production
Countries with steelmaking hubs now need to address emissions by looking at policy and funding to support these industries' transitions.
In the UK, the South Wales Industrial Cluster (SWIC) includes Tata Steel, Liberty Steel and Celsa Steel. It explores decarbonization schemes and projects such as CO2 transport and storage, low carbon electricity and the infrastructure required for a hydrogen economy in South Wales.
Zero Carbon Humber (ZCH) includes British Steel as part of the consortium, which aims for net-zero carbon cluster by 2040.
The UK government has previously announced funding for its Green Industrial Revolution, and Industrial Decarbonization Strategy, intended to create the world’s first low-carbon industrial sector.
Germany is home to steelmakers Salzgitter, Arcelormittal, Thyssenkrupp, Dillinger and Saarstahl. The country’s policies, Steel Action Concept and National Hydrogen Strategy, send strong signals for climate-friendly steel made in the country. It will spend €5 billion on decarbonizing the industrial sector between 2022 and 2024.
It will invest more than €8 billion ($9.74 billion) to fund large-scale hydrogen projects across the steel, chemical and transport industries.
With Dutch partners, it is establishing the Clean Hydrogen Coastline network as part of the Important Projects of Common European Interest (IPCEI) program, in which some steelmakers are participating to ensure that green hydrogen is available in sufficient quantities and at competitive prices in future.
In Sweden, the Hybrit project by steelmaker SSAB, iron ore producer LKAB and power company Vattenfall has received 689 million Swedish krona ($78.9m) from the government to support its hydrogen ironmaking project, with SSAB operations accounting for 10% of Sweden’s CO2 emissions and LKAB accounting for 4%.
Sweden-based Ovako and H2 Green steel will also use hydrogen in their processes.
France will spend €30 billion on decarbonizing, which is part of a wider investment plan designed to support the post covid economy. Much of the money is coming from the EU, with climate objective strings attached. Steel companies residing in France include Arcelormittal, Dillinger and Stahl-Holding-Saar (SHS).

Decarbonization complicates an already complex marketplace. Our latest analysis, the true price of green steel, looks into the ripple effects of overhauling the market on the steelmaking process and supply base.
Read more from our steel decarbonization series and visit our dedicated hub today.

Carrie Bone

carrie.bone@fastmarkets.com

Published

Carrie Bone

August 26, 2021

08:00 GMT

London